The Calm Before the Oncoming Election TrainThe Calm Before the Oncoming Election Train

Last year was relatively quiet in the valuation arena. However, for those looking for inchoate signs of change, the prospects for a significant shift appeared in tax-affecting valuations for shareholders of S corporation (S corp) stock. Among the most difficult signals to read is the start of a material change in case law. Two cases in 2019 suggest the Internal Revenue Service’s long-standing approach to valuation of S corp stock may require revision. At this time, it remains uncertain if the cases represent a false positive for taxpayers, but after 20 years of consistent acceptance of the current IRS position, the 2019 cases offer a potential look at a coming change. 

Whenever a presidential election year approaches, legislative activity...